Yuriy 0:00

This past Sunday, November 1st, two things happened to every landlord in Philadelphia at the same time. First, the Safe Healthy Home Act stopped being something to prepare for and became the law. Not a proposal, not a headline, not coming in November. It is here. And if you file an eviction this week, with a stale certificate of rental suitability, it may get rejected. If you send a non-renewal without a written reason, it doesn't count. That's the city of Philadelphia as of Monday morning. And second, the winter leasing season is officially arrived. I've got the October numbers in front of me, and they show the slowest market we've seen all year, 61 days on market, and the gap between what landlords are asking and what tenants are paying just jumped five times compared to September. New rules and slow market in the same week. Today, I'm walking through both what actually changed on day one of this law and how to run your operations through the winter without giving money away. Let's get into it. Welcome back to the Philly Landlord Guy, the show where we give you real, practical, no-fluff information about owning rental property in the city of Philadelphia. I'm your host, Yuriy Skripnichenko, licensed real estate broker and certified property manager here in Philly. Today is a practical episode, no zip code deep dive this time. This one is about your operation, the market numbers first, then the law. All right. October 2026, all of Philadelphia County residential lease straight from Bright MLS. We had 1,870 new units listed, 1,093 units rented. That's a 58% absorption rate, meaning for every 10 units that hit the market, only about six found a tenant. Compare that number to the summer when we were running close to 90%. Days on the market, 61. Let me put that in the context before, because this is a trend now, not a blip. August was 46 days. September jumped to 58. October, 61. The market has been slowing down for the three straight months, which is exactly what the calendar says it should do. Families moved before the school year. The summer renters are settled. What's left searching in November and December are fewer people moving for harder reasons, a job change, a breakup, a problem with their current place. Now, here's the number that worries me more than days on the market. The median listed price in October was $1,866. The median price listings actually closed at $1,733. That is a $133 gap. In September, that gap was $25. The city was pricing almost perfectly. One month later, the gap is five times wider at the same time when we have much slower season. What does that tell you? Landlords haven't adjusted to the season yet. The asking price are still priced for July. The tenants shopping in October were not paying July prices, and the leases that closed lower. Months of supply also moved to 3.3 from 2.5. More inventory sitting, chasing fewer tenants. So one piece of good news, though, hiding in the report that November inventory is at 4,056 units, which is actually down from 4,400 a year ago. So this winter is structurally a little bit tighter than last winter. This is a seasonal slowdown, not an oversupply problem. I hope so. We will see it next month. So here's what I want you to take from this, and I'll keep it simple. If you have a vacancy right now, you have two honest choices. Price it for the actual November market, which means at or slightly below that $1,733 closed median for a typical unit, not at the 1866 wishlist median and rent it in a reasonable time. Or if your unit shows really well and you can carry it, Consider a shorter lease term that gets your next renewal back on the spring cycle where the tenants are. What you should not do is list at summer price in November, sit for 60-plus days, and then cut the price away in January after eating two months of vacancy. We do this math on the show every month. The vacancy always cost more than the discount. And if your tenant's lease renewal is coming up, this is the renewal season in every sense. A decent tenant renewing at the fair number in November is worth more than an theoretical better tenant that you might find in 61 days. Which brings me directly to the law, because the rules around renewals just changed. So the Safe Healthy Home Act, we've covered this law twice on this show already this year when it passed in April and when Mayor Parker signed it in May. I'm not going to, re-explain every provision today. Go back to those episodes if you need the full breakdown. we'll also have a complete landlord checklist, posted on the TrustArt website. I will put the link in the show notes. So today is different. the law took effect this past Sunday, November 1st. It is Wednesday morning, you own rental property in Philadelphia, what is actually different in how you operate starting now? The honest caveat before I start, because you know I do not sugarcoat, one, the landlord's lawsuit against the legislation is still active in the courts. The law took effect on schedule, but the litigation continues in the background. So the landscape could still shift. I don't really believe in this too much, and don't bet your operations on that happening. Comply now and treat anything from the courts as a bonus. Two, I'm not a lawyer, and this is not legal advice. For your specific situation, talk to a Philadelphia landlord-tenant attorney. What I'm giving you here is the operations view. Here's the day one reality in order on how fast it can bite you. Number one, evictions. The paperwork requirement is live today. Any eviction you file from now on needs a certificate of rental suitability issued within 30 days of the filing, not the 30 days before the lease started as it was before, even though you're still supposed to sign that with or provide that w- to the tenants within 30 days, of the lease inception date. But now also you have to do the same before filing for eviction. an expired certificate means a rejected filing even if the tenant owes you three months of rent. So if you have a delinquency heading towards filing right now, the very first thing you do before the notice, before calling the attorney, is pull a fresh certificate of rental suitability and your license have to be active, in good standing Because filings now come with your paperwork stapled to them. If you manage this the way we do at TrustArt Realty, this is a checklist item. If you're self-managing and you haven't looked at your rental license since you got it, look at it today. Number two, good cause eviction now covers every lease, not just the one under a year, and this renewal cycle is the first one under the new rules. Before Sunday, good cause requirements applied to month-to-month and short leases only. Now it is everything. If you want to terminate or not renew any tenancy, one-year lease, two-year lease, doesn't matter, you need a legitimate legally defined reason, and you need it in writing. Non-payment, documented lease violations, you're moving in, you're taking the unit off the rental market, those are still valid causes. "I just want a different tenant" is not. And this is one of, the ones that trips the landlords the most is that you cannot just not renew because you want to sell your house. There is a caveat to it, but again, we will not go into details, for this. So this is the operational detail people will miss. The leases renewing in November and December are the first ones where this applies. If you were planning a non-renewal, do not send a casual text. Put the cause in writing. Make sure it's actual cause under the law and keep a copy. Number three, the habitability presumption is live, and this one changes who has to prove what. Under the new law, if a code violation is issued against your property and the correction deadline passes without you fixing it or filing a timely appeal, there is now a legal presumption that you've breached the warranty of habitability, the tenant can pursue rent abatement, and the burden is on you to prove o- otherwise. Flip that around and understand that it means practically. An open L&I violation sitting past its deadline is no longer just a fine risk. It's a direct threat to your rent collection. The 30 days cure clock on serious violation is the number to live by now. When a violation notice arrives, you have to fix it or you appeal it. The one thing you cannot do anymore is just let it sit and pass that 30 days clock. Number four, retaliation protection got much broader for the tenants. Tenants join a tenant organization, call L&I, complaints to a council member office, any adverse action you take after that is going to be looked at through the retaliation lens. This is where I remind you of something we covered in the rent increase episode. Document your reasoning. If you raise rent or non-renew, Your file should show the market data and the business reason with the dates, not because you're doing anything wrong, because it is the new environment. And number five, what is not in effect yet? The proactive rental inspection program, the one where L&I inspects every rental on a cycle without waiting for complaints. The authority for it is live as of Sunday, but L&I has not published a start date or a schedule for this. So the worst gives them until 2030 to get a regular cycle. so no, an inspector is not showing up at your door this month, but the honor system era is officially ending, and the properties with deferred maintenance are the ones that will feel it first when the program rolls out. Use the quiet time to get it fixed. Now let me connect this law to the calendar because the timing here is not theoretical. Heat season starts at October 1st. Philadelphia requires you to provide adequate heat through the winter months. In the past years, a no heat complaint got you a violation and a fine under the Safe Healthy Home Act. That same violation uncured past the deadline now carries the habitability presumption and the rent abatement exposure we just talked about. So the most expensive repair this winter is the one you ignore for 30 days. A few thousand dollar heater replacement in November hurts. A heater that you let sit broken into a violation, into non-compliance, into abated rent, and a retaliation-protected angry tenant, that's a different order of pain. when the no heat call comes in, it goes to the front of the line every time. That was true before Sunday because it's the right way to operate. Now it is also the cheap way. One quick money item while I have you, because the deadline is four weeks out for this. If you live in property you own in Philadelphia, your own home, your house, heck, in a duplex, the homestead exemption application deadline is December 1st. If you do not have it, it knocks $100,000 off of your taxable assessment and saves most homeowners about $1,400 a year. Five minutes on the city's website, It doesn't apply to your pure rentals, but for your own residence, there is no reason to leave that money on the table. If you're already enrolled, you don't need to do anything or reapply unless your deed changed recently. Quick thank you to our sponsor, TrustArt Realty. Everything I just described, the fresh certificates before filings, the written good cause documentation, violations cured inside the clock, heat calls handled immediately, that is literally the system TrustArt Realty runs every day across, our whole portfolio. If you are self-managing and this episode felt like it's a lot, that's because it is a lot now. TrustArt Realty offers all of our listeners a free management consultation and a free rental analysis, including an honest look at whether your operation is compliant under the new law. Reach out to us at trustartrealty@phillylandlordguy.com or hit the link in the show notes and go to trustartrealty.com to schedule your consultation. Now let's lend this. The market is winter now. Sixty-one days on the market and a $133 gap between asking and closing. That tells me most landlords haven't accepted it yet. price for November, not July, or hold your renewals like gold because the tenant you keep is worth more than the one you will find in two months. The law is life. Fresh certificate of rental suitability before any filing. Written good cause for any termination or non-renewal, starting with the leases renewing right now. Violations fixed or appealed inside 30 days because an open violation is now a threat to your rent, not just a fine. And heat calls to the front of the line all winter. Here is the thing that I keep coming back to, and I said it when this law passed. If you run clean properties with current paperwork and you fix things when they break, this law was not written to hurt you. Yes, it's inconvenient. Yes, it puts more paperwork on you. But it was written for the landlords who collect rent on properties where they refuse to maintain or fix things that's supposed to be fixed. The floor moved up on Sunday. Make sure you're standing above it. The full landlord checklist for the Safe Healthy Home Act is on the TrustArt Realty website. I will put the link in the show notes. If this episode was useful, subscribe, leave a review, or drop your questions in the comments. I read them and answer them. Keep your properties clean, stay legal, and I mean that more literally than usual this week, and I'll catch you on the next episod.